Agenda item

The Cabinet Member for Finance introduced the report on the Council’s capital and revenue position for the 2014/15 financial year, as at 30 September 2014.

The General Fund showed a projected end of year spend of £168.49m against the total approved budget of £165.32m.  Whilst this represented an improvement of £1.1m on the position as at 31 August 2014 due to the implementation of spending control measures across Council services, there remained a projected year-end overspend of £3.17m.  The Cabinet Member for Finance advised that the Children’s Services budget was continuing to show considerable in-year pressures totalling £4.652m and he had asked the Corporate Director of Children’s Services to report to this meeting on the reasons for the forecast overspend, together with options to bring expenditure levels into line and reduce the likelihood of the Council having to use reserves to achieve a balanced budget.

In respect of other issues relating to the General Fund, the Cabinet Member referred to the proposal to reduce the saving within the Democratic Services function (CEX/SAV/09) by £148,280.  This was in response to the views expressed by the Public Accounts and Audit Select Committee during its recent consideration of the budget saving proposals that a post of Scrutiny Officer should not be deleted, as well as proposals to enhance the direct support available to Members which had been strongly recommended in the recent Corporate Peer Challenge.  As a consequence, a new post of Leader and Members’ Services Manager was proposed and the vacant Political Assistant post would be appointed to.  Another issue was the delay in the planned closure of 2 and 90 Stour Road offices, which would result in a shortfall of £295,000 in the planned £300,000 saving.  The Cabinet Member added that all directorates were looking at innovative ways to reduce the current overspend position and build a firmer financial position going forward.

The Housing Revenue Account (HRA) continued to show a projected break-even position for the year, although it was noted that a projected £500,000 overspend in the Repairs and Maintenance service was being mitigated by underspends in other areas.  The Cabinet Member also referred to the failure to achieve any of the £318,000 saving in respect of energy billing for communal housing areas and shortfalls in respect of staffing restructures which may require future reports to the Cabinet.

The Capital Programme showed a projected spend of £142.12m against the original budget of £156.69m and the Cabinet Member for Finance referred to several amendments to budgets to reflect current delivery programmes.  In response to comments regarding the slippage that occurs on the annual Capital Programme, it was agreed that the Chief Finance Officer should report to a future meeting on the issue.

The Cabinet Member for Education and Schools commented on the hard work of the Children’s Services Asset Management team for delivering the extensive school improvement and expansion programme, while the Leader of the Council recognised the efforts of all staff in the drive to mitigate the financial pressures being faced by the Council. 

With regard to the budget overspend within the area of children’s social care, the Corporate Director of Children’s Services presented a paper (Appendix E to the report) and referred to the continual pressure on services and budgets due, in the main, to the demographic growth in the Borough.  The paper included details of steps taken over the past few years to achieve an overall balanced budget within the directorate while also contributing to the Council’s savings targets.

A range of measures totalling £1.12m had been identified to offset the overspend in the current year and a number of other, more radical, options had also been developed.  In respect of the latter, the Corporate Director referred to the cessation of non-statutory case file audit activity and the cessation of non-statutory SEN transport which were proposed for immediate implementation.  The Corporate Director also advised on weekly management budget meetings that were being held and other activities to drive down costs.

Cabinet resolved to:

(i)  Note the projected outturn position for 2014/15 of the Council’s General Fund revenue budget at 30 September 2014, as detailed in paragraphs 2.4 to 2.10 and Appendix A of the report;

(ii)  Note the impact on the outturn position of expenditure restrictions and early savings implementation agreed by Minute 31 (7 October 2014);

(iii)  Note the potential actions identified by the Chief Finance Officer to return to a balanced budget by year end, as detailed in paragraph 2.2 of the report;

(iv)  Agree not to call on General Fund balances at the current time but to instruct the Chief Finance Officer to reinforce the spend freeze with all budget managers in order to contribute to delivering a balanced position by year end;

(v)  Note the progress against the agreed 2014/15 savings at 30 September 2014, as detailed in paragraph 2.11 and Appendix B of the report;

(vi)  Note the Corporate Director of Children’s Services addendum at Appendix E to the report and:

(a)  Accept the savings actions identified at paragraphs 2.3.2, 2.8 and 2.10 of Appendix E to the report and require the Children’s Services directorate to bring forward further cost reductions by implementing, wherever possible, agreed savings for 2015/16;

(b)  Note the additional options for potential savings outlined in section 3 of Appendix E to the report and agree that the options relating to the cessation of non-statutory case file audit activity and the cessation of non-statutory SEN transport (paragraphs 3.1.3 and 3.1.5 respectively) be implemented; and

(c)  Agree that reports be presented to future meetings of the Cabinet as follows:

·  27 January 2015 - information from the planned external reviews of spend and the impact on cost reduction to date.

·  24 March 2015 - pressures on and the implications for Medium Term Financial Planning and the impact on cost reduction actions undertaken.

(vii)  Note progress against the agreed 2014/15 Housing Revenue Account (HRA) savings as detailed in paragraph 2.12 and Appendix B of the report;

(viii)  Note the overall position for the HRA at 30 September 2014, as detailed in paragraph 2.12 and Appendix C of the report;

(ix)  Approve the 2014/15 budget re-profiles and increases in funding on capital budgets, as detailed in paragraph 2.13 and Appendix D of the report;

(x)  Approve a new capital budget of £283,000 to develop the Council’s website as detailed in paragraph 2.13 of the report;

(xi)  Agree to withdraw £148,000 of the saving CEX/SAV/09 presented to Cabinet on 7 October 2014 in order to continue the employment of a Scrutiny Officer and to employ a Political Assistant and a Leader and Members’ Services Manager in Democratic Services, as detailed in paragraph 2.9 of the report; and

(xii)  Request officers to report to a future meeting on the issue of slippage within the Capital Programme.